Exhibit
4.2


 


Execution Copy


 


AMENDMENT
TO RIGHTS AGREEMENT


 


This Amendment to
Rights Agreement (this “Amendment”) is entered into as of December 15,
2009 by and between Facet Biotech Corporation, a Delaware corporation (the “Company”),
and Mellon Investor Services LLC, a New Jersey limited liability company, as
Right Agent (the “Rights Agent”).


 


RECITALS:


 


WHEREAS, the Company and the Rights Agent have
previously entered into a Rights Agreement dated as of September 7, 2009
(the “Agreement”; capitalized terms used but not defined herein shall
have the meaning set forth in the Agreement);


 


WHEREAS, pursuant to Section 27 of the Agreement, for so
long as the Rights are redeemable, the Company may in its sole and absolute
discretion amend any provision of the Agreement in any respect without the
approval of any holders of the Rights, as evidenced by a writing signed by the
Company and the Rights Agent;


 


WHEREAS, as of the date hereof, the Rights are redeemable; and


 


WHEREAS, the Board of Directors has deemed it fair, desirable
and in the best interests of the Company and its stockholders to allow the
acquisition by certain existing Company stockholders of additional shares of
Common Stock without any such stockholder becoming an Acquiring Person, and to
amend the Agreement accordingly as set forth below to permit such transaction,
and has duly authorized any officer of the Company to execute and deliver this
Amendment.


 


NOW, THEREFORE, in consideration of the premises and
mutual agreements hereinafter set out and of other consideration (the receipt
and sufficiency of which are acknowledged), the parties hereto agree as
follows:


 


1.               Amendment of Section 1(a) of
the Agreement.  The definition of “Acquiring Person” in Section 1(a) of
the Agreement is hereby amended and supplemented by adding the following
sentences at the end thereof:


 


“Notwithstanding
anything contained in this Section 1(a) to the contrary, solely in
the case of any Person who is one of the BVF Entities (as defined below) and
with respect to no other Person: (A) a reference to “20%” shall be
substituted for each reference to “15%” in the foregoing provisions of this Section 1(a),
so as to permit the Beneficial Ownership of up to 20% of the Common Stock of
the Company by such BVF Entities pursuant to, and only if the BVF Entities are
acting in compliance with, the terms of the Stockholders Agreement, dated as of
December 15, 2009 between the Company and the BVF Entities (as the same
may be amended from time to time, the “Stockholders Agreement”) and (B) in
the event that the BVF Ownership Percentage is greater than 15% and less than
20%, in the event of any Transfer (as defined below) by a BVF Entity, upon the
occurrence of any such Transfer such references shall automatically be deemed replaced
by references to the then-current BVF Ownership Percentage plus one share of
Common Stock, solely to the extent such then-current BVF Ownership Percentage
is both lower than the previously applicable BVF Ownership Percentage and less
than 20%,


 

















 


unless and until such
then-current BVF Ownership Percentage is less than 15%, at which time all such
references shall revert to “15%” and no additional changes shall be made
pursuant to this clause (B).  For
purposes of this definition:  “BVF
Entities” shall mean Biotechnology Value Fund, L.P., Biotechnology Value
Fund II, L.P., BVF Investments, L.L.C., Investment 10, L.L.C., BVF Partners
L.P., BVF Inc. and Mark N. Lampert; “BVF Ownership Percentage” means, at
any time, the percentage of the outstanding Common Stock Beneficially Owned in
the aggregate by the BVF Entities and all Affiliates and Associates thereof as
of such time; and solely as used in this Section 1(a), “Transfer”
shall mean, directly or indirectly, to sell, transfer, assign, pledge,
encumber, hypothecate or similarly dispose of (by operation of law or
otherwise), either voluntarily or involuntarily, or to enter into any contract,
option or other arrangement or understanding with respect to the sale,
transfer, assignment, pledge, encumbrance, hypothecation or similar disposition
of (by operation of law or otherwise), any Common Stock or any interest in any
Common Stock, including by tendering (or announcing an intention to tender)
into any tender offer, regardless of whether such Common Stock or interest is purchased
pursuant to such tender offer, and for such purpose the term “Transfer” shall
include the sale of an Affiliate or Associate of any BVF Entity or the BVF
Entity’s interest in an Affiliate or Associate that Beneficially Owns shares of
Common Stock.”


 


2.               Governing Law.  This Amendment and the Agreement, as amended hereby,
shall be governed by and construed in accordance with the laws of the State of
Delaware, provided, however, that all
provisions regarding the rights, duties, obligations and liabilities of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed entirely
within such state.


 


3.               Effect of Amendment. 
Except as expressly modified hereby, the Agreement remains in full force
and effect.  Upon the execution and
delivery hereof, as of the day and year first above written, the Agreement
shall thereupon be deemed to be amended and supplemented as hereinabove set
forth as fully and with the same effect as if the amendments and supplements
made hereby were originally set forth in the Agreement, and this Amendment and
the Agreement shall henceforth be read, taken and construed as one and the same
instrument, but such amendments and supplements shall not operate so as to
render invalid or improper any action heretofore taken under the Agreement.


 


4.               Descriptive Headings.  Section headings
in this Amendment are included herein for convenience of reference only and
shall not constitute a part of this Amendment for any other purpose.


 


5.               Counterparts. 
This Amendment may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Amendment and all of which,
when taken together, will be deemed to constitute one and the same
agreement.  The exchange of copies of
this Amendment and of signature pages by facsimile or electronic
transmission shall constitute effective execution and delivery of this
Amendment as to the parties hereto and may be used in lieu of the original Amendment
for all purposes.  Signatures of the
parties hereto transmitted electronically or by facsimile shall be deemed to be
their original signatures for all purposes.


 


2

















 


6.               Severability. 
If any term, provision or restriction of this Amendment is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions or restriction of this
Amendment shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.


 


[Signature Page Follows]


 


3

















 


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.


 


	
   

  	
  FACET BIOTECH CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Faheem Hasnain

  
	
   

  	
  Name:

  	
  Faheem Hasnain

  
	
   

  	
  Title:

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  MELLON INVESTOR SERVICES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Asa Drew

  
	
   

  	
  Name:

  	
  Asa Drew

  
	
   

  	
  Title:

  	
  Vice President & Senior Relationship
  Manager

  



 


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